To those who want out of social security...Why not let them go??

[leftyandproud]

Seriously...think of all the bitching and moaning it would end.
Let them take their money and leave the system. They are on their own.

Give people the option to opt out, or at least partially opt out.
They would reduce future obligations drastically and we could keep the current system for those who want it.

Why not let people choose?

[Vickers]

1. They will squander the money, then expect the gubmint to take care

of them anyway.

[leftyandproud]

4. too bad

That will be their choice. Let them have it, and deal with the consequences.

[radwriter0555]

24. The $$ will be BACKED by the US govt, meaning YOU and ME with OUR tax

dollars, so when bush's pals STEAL it, which is the plan, WE get to pay it back -- twice.

Just like the savings and loan scandal that Neil Bush ran off with 7 Million on (Silverado).

People won't make bad investments, (which will be guaranteed not to fall below a certain amount) but the thieves will steal it and since it's insured, we get to pay them back.

[Born Free]

53. It will work like an "open union shop"

It will be one of those situation where they can choose not to pay union dues, but demand the same benefits as the individuals that do pay union dues. If their investments go sour, they come up short they will expect the taxpayers to bail them out - of course I can understand why they feel like that, many corporations do the same thing, make poor business decisions they cry for corporate welfare while the administrative officers make off with big financial rewards. Partial privatization of social security is the same as the attacks on the union shops, allowing individuals to stop paying dues.

[trotsky]

2. It would cut benefits for the people getting checks now.

It's not a pay-as-you-go system. Today's payers are financing today's retirees.

[MSgt213]

3. You can't be serious. A simple solution. No we got attach all kind of

shit to it to make it unworkable for most people.

[leftyandproud]

8. I want out NOW

This damn won't be there for me and I know it.

In reality, everyone is paying 15.2%. in social security taxes. You pay 7.6% and your employer generously "matches" this...meaning it comes directly out of your paycheck from day one. They factor this tax into the cost of employment before you even get the job..

Hell, out of that 15%+, I would be happy just to take 1/3rd, or 5% of the taxes for use in a personal account. I'd be happy to keep paying the other 10% into the current system if they would just let me go.

Here's a statistic that will blow your mind.
If you make $7.00 an hour for your WHOLE LIFE...$7 bucks and you NEVER GET A RAISE from age 18-65, had you invested just 4% of your social security taxes in a private account, you would have a nest egg worth 2.4 MILLION DOLLARS. At 5% interest, you could draw an income of $120,000 a year without EVER touching the principal! You could live on that $10,000 a month forever, and pass your entire $2.4mill to your children or grandchildren...giving them some true "social security".

Compare that to today's whopping $1100 a month (and likely to shrink as the baby boombers drain the system). This figure is using just 4% of the current 15.3% FICA tax. It should demonstrate what an incredibly bad deal workers 35 and under are getting with the current system.

[NewHampshireDem]

12. I'd like to see the math on that ...

No offense, but your numbers don't really seem to make any sense ...

$7 X 4% = $.28

$.28 X 2000 (work hours in a year) = $560 (to invest each year)

$560 X 7% (rate of return) = $39.20 (annual investment income)

$599.20 X 40 (years of investing) = $23,968

I don't trust my own math, so I checked with Bankrate's free calculator http://www.bankrate.com/brm/calc/savecalc.asp It computes that in order to save 2.5 million in 40 years, you need to put away $952.45 each month and earn 7% interest.

:shrug:

Okay, my math was wrong too ... I made an error in my calculations. Using another Bankrate calculator, I came up with this figure
Based on putting away $47 each month and getting a 7% return (compounded monthly), you'll have $123,366.23 at the end of 40 years.

http://www.bankrate.com/brm/cgi-bin/savings.asp?amt=0&dep=47&cmp=Monthly&int=7&yrs=40&submit=Calculate+Savings

[bleedingheart]

14. I view it as part of my diverse portfolio

no one was meant to get rich off of Social Security. That is your first assumption. It is a social safety net. Do you realize what it was like before Social Security?

Second, people should have been saving all along. Sadly many people didn't put jackshit away and all they have is social security to live on. Also, many people suffer illnesses, job losses and other catastrophes that destroy their savings.

[snippy]

18. Your math is way off. The "nestegg" would be $300,000 if you made monthly

deposits of 4% of your wages and earned a 10% return compounded monthly. In reality a 10% return on such a small amount is unlikely after transaction costs and management fees and it also is unlikely that monthly compounding would be available. With an 8% return and semiannual compounding the nestegg would be around $162,000 after 40 years.

For someone making $50,000 per year and making monthly deposits of 4% of wages and earning 8% return compounded semiannually the nestegg would be around $575,000 after 40 years. With a 10% return compounded monthly it would be $1,065,089.

[leftyandproud]

25. figure that with the 12% average please

www.bigcharts.com

[leftyandproud]

26. by the way...even with the lesser numbers you used..

isn't 300 THOUSAND DOLLARS quite an impressive nest egg for someone who never earned a penny more than $7 an hour? Would they not be better off having that PLUS a smaller guaranteed benefit bought with their remaining 11% FICA tax?

[snippy]

30. It will all depend on the details of the plan.

Especially how it will be funded and how it will handle a loss of 30% or more in one year for people who either just retired or are about to retire. Someone who has their retirement account cut in half the year they retire may have problems getting by.

[sandnsea]

35. Medicare

You're forgetting medical expenses. The tragedy of American life is that 90% of workers scrimp and save their whole lives, getting less and less while CEO's and stockholders get more and more; then at the end of their lives turn over their savings to a medical corporation. They fuck you coming and going. Even funeral homes are corporate these days.

[SoCalDem]

57. Um...NO... they want medicare shitcanned too.. One illness

and the oldster with 300K is probably in the poorhouse..or at least out of their own house for good..

SS and medicare are a safety net.. no one is saying that the frugal or lucky person cannot aslo save or have a 401K..

It's a way to guarantee that old people have the bare necessities of life, and some health care.. That's all it is.

I cannot imagine anyone who is a democrat, that would willingly deprive old people of those things..

and when it's privatized, a woman who is widowed young, is SOL and so are her kids..

Let's forego a few tanks/aircraft carriers instead..

[Joy Anne]

19. Where are you planning to get 5% interest?

The highest "safe" (federally insured) rate I've found is 2.4%, and that's with a $50,000 minimum deposit. I have four different index funds, which have downsides, too, and none hits 5%.

[Yupster]

49. Listen to this CD and bond seller

You didn't look very hard.

[Joy Anne]

55. CDs and bonds

I wouldn't tie myself down in CDs or bonds at this time. Rates (and costs of living) are almost certain to rise.

[OneTwentyoNine]

28. Pssst...Put the money in Enron...its a company down in Houston

It can't miss,your stock with quadruple and then quadruple again. Let those poor fools paying in to SS weekly get the small returns,we can get the big ones!!

[sandnsea]

34. They're screwing with your head

You're buying right in to what they want you to do. Get pissed off and go for privatization. Which means your money will be in corporate America. They'll continue to push "tort reform" and "capped damages", so corporate America doesn't have to worry about screwing over the people. When they file bankruptcy to avoid paying you, you'll have no recourse. And they'll just walk away with the money, change their name, and start all over again. You have to THINK.

Social Security IS NOT a retirement plan. It is also disability & survivor's benefits when a spouse or parent dies. It's worth fighting for. WE, the baby boomers, already had our taxes raised in the 80's to cover our own retirement needs. George Bush just gave that money to the wealthy. And now wants YOU to dump your own security by screaming social security bankruptcy.

[Carolab]

50. Did you forget BushCo

is in the business of STEALING pensions?

[SoCalDem]

56. Excuse me... "When the babyboomers DRAIN the system"???

I suppose it does not matter to YOU, that we were the ones who really got SOAKEd back in the reagan years when he practically doubled the withholding.. This was at a time in our lives when most of us were "just starting oout" so the rationale was that by soaking us THEN, we would secure the then-current retirees, AND have a HUGE surplus when WE retired.. So you see, we have been PRE-PAYING our SS benefits, AND supportiing the oldsters who paid way less in that they have collected (your grandparents/our parents)..We also had the "pleasure" of several bad recessions, home interest at 15.something%..yes I said FIFTEEN PLUS...

We also have been the first "modern" generation to see our purchasing power/after-tax income (buying power) D R O P ..

and this is all happening while we (some of us) still have 25-30 year old "kids" who are still begging for "help" or just flat out NOT leaving home at all.. and then there are the elderly in the family who are also "our responsibility"..

So excuse me if I do not feel all "warm & fuzzy" about the young'uns getting their panties in a wad about "not getting THEIRS"..

When you put 40 years worth into a system that YOU PREPAID your own benefits, you just kind of want the govt to hold up their end of the bargain..

This is the stuff that repubes do best.. They pit groups against each other..

Tired almost-old people vs greedy youngsters.. works every time..


As far as I am concerned they just need to do ONE thing.. Take the cap off the upper limit, and the "problem" will go away..

The way most of us are scrambling for health care, you youngsters won;t have to worry .. Our lifespans will probably be shorter than our parents..so there is HOPE for you.. we will just oblige the youngers by dying early, so you can get your money :(

[The Zanti Regent]

59. Gee, what happens if you have a stroke and are disabled next month?

Oh, I forgot, you're going to buy a private disability policy for, say, 15% of your income?

Then there's the wife and kids, what happens if you pass away? oh yeah, but lots of life insurance, use 20% of your income for that...

Dream on

[mrbill]

5. preachers can weasle out of social security........

lot's of groups are exempt. like congress.

[Lydia Leftcoast]

42. No, preachers do not get out of Social Security

My dad was a preacher, and he was in it. The difference was that he paid "estimated tax" instead of the church paying FICA, which is just like what self-employed people do.

[mrbill]

46. some are exempt if they fill out a form............

Services that a minister performs in the exercise of his or her ministry are covered under the Self-Employment Contributions Act (SECA). That means they are exempt from Social Security and Medicare withholding, but they are responsible for paying self-employment tax on their net earnings from self-employment.

There are some members of religious orders, ministers, and Christian Science practitioners who have requested and been granted exemption from self-employment tax. There are also members of religious orders who have taken a vow of poverty and ministers who are covered solely by the social security laws of another country under a social security agreement between the United States and that other country.

http://www.irs.gov/faqs/faq-kw212.html

[Carolab]

51. Right--I'm self-employed

and have to pay FICA--I don't get any "matching" from an employer. I paid into SS for 40 years--damned if I am going to be ripped off by the likes of BushCo. Privatizing is a scam to make money managers and corporations rich--and BUST you.

[Yupster]

48. Most school teachers

in Texas and 12 other states are able to not be in social security.

Professors in Texas don't even have to be in the Teacher Retirement System. They can invest their social security money themselves in the Optional Retirement System.

I don't know what makes them so special.

[NewHampshireDem]

6. I don't believe that Social Security's best feature is that it protects ..

people from themselves. It protects all of us from ourselves. The difference is that if I squander my "ownership" money on a bad investment--or something like Enron, which was being hawked as a good investment right up until the day the scandal broke--I lose out and end up eating catfood when I retire.

However, take that and multiply it by a million, or tens of millions, and you have a serious social problem on your hands. We will literally have two Americas, one first-world and one third-world.

Are you really going to let grandma live in squalor? Probably not, so you'll work not just to support yourself, but to support her. So, how do you save for your own retirement--or put money into your child's college fund, or put money in your "medical savings account"? You can't, so you'll fall further and further behind.

As a result, poverty will rise. Then crime will rise. Then some of us will be living behind 12-foot high, barbed-wire-topped fences, while the rest of us live in ghettos that make Calcutta look festive. American society will look more like South Africa than what we know now.

Of course, maybe you'll be able to find a decent job as a security guard, or driver, or maid.

[leftyandproud]

10. You won't have the option to squander it..

We are talking about the INDEXES here...5000 or 6000 stocks...the large and small companies that ARE America. Putting a percentage it that (maybe 50%), and another 50% in guaranteed investments (CD's, bonds, etc) would average a very nice and stable 10% over time.

[NewHampshireDem]

13. Again, your numbers are a more than a little suspect ...

10%? What, exactly, is that 10% rate of return based on?

Furthermore, any return also is going to include some "drag" (from 1/4% to 1%) for administrative costs.

[leftyandproud]

15. historical average is 12%

for the past 70 years, the average return in the broad market indexes has been 12%

90% of the 5 year periods in have been UP years for the markets. The 70's were the only exception that I know of.

Anyone who looks seriously at the issue can't argue the numbers. Virtually any private investment (even CD's and guaranteed bonds) will yield a much higher return than social security. There are other arguments against it and that is fine...but why not let those who want out, get out...at least partially? If I still pay 10%, and keep the 5% in a mandatory private account, I really don't see the problem. This is really the only issue where I disagree with the dem leadership. Younger workers are doomed in today's system, and the dem leadership wants to keep us locked in to the current system forever, with no choice and no hope of getting our money back.

[snippy]

23. With a 12% annual return compounded monthly a worker making

$7 an hour for forty years and depositing 4% per month would have $558,520.

[Starlight]

40. 12% average? You are dreaming! That's not even close. n/t

[snippy]

21. The numbers are not suspect, they are wrong. Way wrong. n/t

[leftyandproud]

27. so the numbers are wrong..

and someone making a tad over minimum wage will ONLY have a nest egg of $600k

better we lock them in social insecurity...12k a year is better than 600 thousand.

right.

[NewHampshireDem]

32. I call "bullshit" on you ...

1. You never present a single calculation or citation to back up your claims

2. Your numbers keep getting larger and larger

Again, let's see the math, let's see the citations. Otherwise, let it go.

[leftyandproud]

36. HERE you go buddy. Check for yourself.

Do the calculations yourself. My initial calculations were wrong but those subsequently made of ($600,000 for 4% contributions on $7 an hour) are accurate.


Try figuring what a person's ENTIRE social insecurity taxes would be worth had they been invested in an index fund at the historical average of 12%. You'll be amazed.

$7.00 an hour X 40 hours per week = $280.00 per week.
FICA taxes paid = 15.3%

15.3% of 280 = $42.84
$42.84 per week X 4 = $171.36 per month

Using the compound interest calculator, this individual making $7.00 per hour would contribute a total of $356,304 to the account over 40 years, yet the power of compound interest brings the value to $2,016,011.41 at age 60. MORE THAN TWO MILLION FRICKIN DOLLARS, for someone who never got a raise...NEVER.

Drawing 5% interest, this person could live on more than $100,000 a year without ever touching the principal.

NOW you know why Albert Einstein said compound interest was the 8th wonder of the world. You also know how f*cked up the current system is for younger workers...

http://www.math.com/students/calculators/source/compound.htm

[NewHampshireDem]

37. Sorry, but your 12% figure, on which your whole argument is based

is totally bogus. I'll say it again: bullshit.

[leftyandproud]

41. ahem

The average annual return on the Whileshire 5000 index (broad market, small mediam + large cap) is a little over 11.5%

It is not bullshit friend. It is reality, and even a 5% return in a government bond would provide a HELL of a much more secure retirement than today's system.

[NewHampshireDem]

54. The Wilshire has only been around since 1974 ...

which is hardly much of a "lifetime" on which to base earning 12% over 40 years. Beside, you still offer NO PROOF of your 12% return. Furthermore, now your backpeddalling ... 5%?!?
Hardly going to be much to retire on at all, and will keep the income slightly above inflation.

[0007]

47. I'll second it!

[Lydia Leftcoast]

43. No matter how big your nest egg is

even if it's $600,000, the value of the dollar may fall enough that it will be comparable to $60,000 today. Don't laugh. I'm 54 years old, and I remember when $4,000 a year was a middle class salary, so who knows what inflation will have done by the time you retire.

Another thing you forget is that you could outlive your savings, as many older people do when chronic illness or disability strikes. Those nursing homes cost megabucks per year.

[LTRS]

7. Because then the rest of us have to pay their share

[Malva Zebrina]

9. same theme, different time

"In this illustration, the Nazis demonstrated that the daily cost to the state of maintaining one chronically ill person (5.5 marks) could be better spent supporting an entire healthy German family. Era: Before WWII"

[bleedingheart]

11. The Grasshopper and the Ant...

sound familiar?

Those who claim they will use their money wisely won't...they will party and spend until the day they have nothing. Then the rest of us ants will have to pay for them anyways...

[One_Life_To_Give]

16. What percentage would squander it?

You have to ask yourself what you would do with those who squander their set-aside. If only 1 in 10 lose all there retirement savings what will we do.
a) Dip into public funds
b) Let them suffer

Unless you are prepared to do option B. The public will lose out on this proposal.

[Malva Zebrina]

20. I can understand a young person getting into a panic

I really can. We turn on others when our own welfare, or what we perceive to be our own welfare/survuival, is threatened. The majority of persons that will be affected and are already being affected by hikes in Medicare premiums, are poor women.

Looking back--my first home,(new) in the seventies cost 20,000. Nice little townhouse with three floors, three bedrooms,dining room, two bathrooms,spacious kitchen and living room, family room, garage and back yard. My education,(sixties) consisting of three years, no time off in the summer, seeking a RN, cost $500 in a hospital affiliated school, including text books, uniforms , room and board. A job included benefits such as health care with no added cost. There were free tuition colleges for residents of that state that offered it and my husband took advantage of that, earning a degree that enabled him a good salary for the rest of his life. We came from poor families but had no debt to pay after that education. We did not have to put ourselves in hock for ten years.

We never projected ahead at that time, that a house today would go for a quarter of a million and more, that six figured salaries is what people strive for, that health care would be so high that some 45 million people could not afford it, that women would have to share the burden of paying bills and put children into day care that lops off more money from the savings, that seniors would be starved out of their social security money slowly, and that the attitude of younger persons would be so flippant toward those as to suggest they be left by the wayside.

My point is that no matter how much money you see being rung up before your eyes using projections llike yours, it can never be a sure done deal. Unknown factors will creep in and you will be forever striving to make those figures pan out forty years from now and perhaps never retire at all. Meanwhile, leaving a whole population of seniors, who thought they had insurance when they paid in, who are totally dependant upon their SS to feed themself, pay for additional medical care, pay for obscenely priced medication, is not very admirable. Or does that count? Perhaps not.

[wishlist]

17. Noncontributors will still demand financial and medical help from govt

Anyone who has worked for the Social Security Administration or Dept of Social Services will tell you there is already lots of bitching and moaning by people who were either underemployed or worked under the table or in their own businesses avoiding paying Social Security and income taxes and health insurance. When these people face financial and medical hardships because they are no longer able to work and have no savings and can't get much or any Social Security, they loudly demand help from emergency govt assistance, Medicaid and SSI as well as private charities. Assistance programs for the needy would be totally overwhelmed if everyone could opt out of Social Security.

[mainer]

22. Make them sign a pledge when they leave

They have to sign notarized declarations that if they blow their investments, they will get no support from the government. None whatsoever.

I have no problem with letting them starve. After all, they believe in "getting government off their backs."

[CornField]

29. For the same reason we don't let those with adult children stop paying

taxes to the schools. It's not just an investment in their own family or their own personal condition... it's an investment in society.

[Malva Zebrina]

33. Or for bridges they will never ever use, or highways they would never

ever use or for clean water, even though their own is clean, or for the clean up of pollution event though their state has clean air, or for the National Parks many of whom they will never ever visit but that are gems in our society and etc. etc.

[demokatgurrl]

31. Because they have an obligation to their elders.

We pay social security to support those who built our country and our wealth, who fought in battles real and political, who raised us and taught us and blazed trails for us. Even those who don't need social security themselves owe it to the previous generations.

[American Tragedy]

38. Well, it would be hard to keep the current system

if everybody stopped paying into it for those who currently need it.

[Cleita]

39. It destroys the system.

That's what the neo-cons want. SS is set up to pay a pension to old people in today's money. For those of us who didn't have that choice back then, it drains the money needed to pay pensions. For the rest of you, investing that portion means that's all you will get in the future and trust me, it won't be much. You already have an option of investing your money for the future with IRAs. So this is another neo-con red herring thrown at the unsuspecting.

[Lydia Leftcoast]

44. If you're any kind of a lefty, you should have figured out by now

that if the Republicans are FOR something that sounds good at first hearing, there's a catch somewhere. There always is.

[T Bone]

45. If that is how it ends up everyone who leaves should also FORFEIT

any current and future rights to SURVIVOR's bennefits. Also, Disability benefits, blindness, and deafness benefits---any other of the possible ancilliary benefits that are obtainable under social security.

That means if you get out and THEN die young, your minor survivors have no rights to survivor's benefits. That means if you get out, and THEN become disabled, you are SOL for disability benefits. And so on. I say anyone who gets out --get the FUCK out and don't fucking come back whining for ANYTHING later.

[hecate77]

52. There is one reason, and one reason only that they want to game SS

They want people to pour money into the markets so they can game them, make a ton of money more and in the end, leave all the poor suckers who invested, well, poor.

The average person will only lose money in these markets. They are set up to siphon money from the hopeful to the greedy.

They have had their eye on the SS trust fund for a long, long time, and had hoped to get it by other means, like shifting it to defense contractors under the guise of war (which they are doing somewhat), but now they have found a better way. Keep the money out of the SS trust fund by tricking young people into trusting the markets.

Remember the crash of 2001, under Bush. How many people lost their retirement money? Way more than you think. A lot of people who had retired in their early 50s are now back at work because they lost everything or almost everything. However, the rich only got richer off this.

[depakid]

58. I don't think most of you have a clue about the effect of SS

on the overall economy. There's a whole lot more to this issue than the merits of personal retirement accounts.

I don't pretend to know the inticacies of how it all works, either- but I'm aware of the fact that SSA turns over funds to the Treasury in exchange for securities and this "masks" an even greater budget deficit than what's reported. Take away a significant portion of this money (and siphon it off to brokerage firm parasites- or hand it over to fraudulent corporations) and could be serious repercussions to the overall economy in ways that no one currently anticipates.

[SoCalDem]

60. exactly.. it's another bush-family scam

:(